Treasurer Peter Costello today stood by government claims of a massive shortfall in Labor's tax and family package.

Mr Costello insisted there was a $2 billion hole in Labor's policy.

Mr Costello had said there was a $700 million hole in Labor's tax cuts because it had not included the cost of paying a $235 annual rebate to 3.5 million low-income earners for 2004-05 before Labor's alternative working tax bonus kicks in next year.

But an analysis by the Treasury of Labor's planned $8-a-week tax cuts for low and middle income earners and pledge to lift the top tax found the Opposition had overestimated the cost of its package by $479 million.

The Treasury report appeared to undermine Liberal claims of a shortfall on which Mr Costello had staked his economic credibility.

But today Mr Costello insisted that Labor had not submitted its full policy for scrutiny by Treasury.

"We're now less than 24 hours out from the election and Labor's tax policy has not yet been fully costed," he said.

"When it's fully costed it's entirely clear that it does not add up.

"We say that the shortfall in Labor's tax policy is in the dimension of $2 billion."

Mr Costello said Treasury could have costed the full tax package within five days of it being announced on September 7.

He said Labor was seeking to avoid having it fully examined.

Opposition treasury spokesman Simon Crean today said Mr Costello had lied to the Australian people and should apologise.

"What does Peter Costello do? Rather than do the honourable thing, apologise and say that he got it wrong and admit that he's staked his economic reputation on something he can't justify, what does he do? He just goes for the bigger lie."

Mr Crean said he did not believe the fact that Labor submitted its policy at the last minute was relevant. "We submitted it in accordance with the Charter of Budget Honesty," he said.

"We had it independently tested and we've been vindicated."

The finding has dealt a blow to Mr Costello, who said he would stake his economic credibility on his claim that Labor's tax package had a $700 million black hole.

Mr Crean said Treasury's costings meant Mr Costello's economic credibility and political integrity was in tatters.